Category Archives: Car Finance

Why you should have car Insurance

Car accidents happen every day. Its bitter truth but we very well know that being a safe driver won’t always save us from these accidents. Accidents are a threat- to your life, car and wallets. It is very sad that despite knowing the value of car insurance most of us ignore to choose it. Why? Don’t we value our cars enough? Don’t we want financial security? Isn’t your car a big investment? So, let’s just accept that overlooking car insurance is not very wise and its better late than never right?

Here are a few reasons if that wasn’t convincing enough for you to get car insurance.

1) State Law – Stating the obvious – It’s the state law requirement. Every vehicle owner is expected to carry insurance in most states. If you don’t have one, you’ll be getting a ticket which will cost you a few hundred dollars, you may lose your driver’s license or even get a sentence to jail. The money that you will spend to pay the tickets off, get your license back or even bail out from jail is going to be far more that what you will spend in getting an insurance.

2) Car is an expensive investment – For most of us, our car is the second most expensive asset in our lives, first being our homes. We buy home insurance to protect our homes, and family insurance to protect out loved. That is just how important it is to buy a car insurance. Protect the expensive investment.

3) Peace of mind – Just like we mentioned before being a safe driver isn’t enough, because what if someone else makes a driving mistake? Car insurance will give you peace of mind while driving because you know that if and when an accident does occur because of some other drivers in-capabilities, you have your share of protection to help you out.

4) Absence of your car can be inconvenient – Now imagine you got into a car accident (you’re doing fine of course) and your car is a damn mess. You don’t have the money to fix it and it is going to be lying in the garage for days together. How are you going to get to places? The whole purpose of having a car is lost for that time period. Getting to work and back is going to be tiring as never before.

5) Protection from a natural calamity – Earthquakes, floods, hurricanes – not so unusual anymore right? What is your car is bait to any of these events? Avoid the unavoidable with a car insurance. These situations are stressful enough for you to be worrying about your car.

6) Non-accident protection – Car theft or vandalism happens more often than you can imagine. You are always going to be worried at the back of your head, if your car is doing fine. Car insurance gives you protection against such unexpected circumstances too. While there are so many measures that you can take to protect your car from such situations and you should, it’s best that you keep the worst in mind and get a car insurance.

7) Covers medical expenses – The medical expenses of the people injured in a car accident that may be your fault and any injuries that you may have sustained are covered by the insurance too. This is one of the many benefits that car insurance provides. So you don’t have to stress about money arrangements in such an event.

8) Protecting your wallet – Without a car insurance, an accident is going to be the reason for a big hole in your wallets. If you don’t have insurance, you have to make all the payments from your pockets – say goodbye to savings, gifts or whatever you may have collected money for. Unless you have a lot saved, chances are you are going to have to spend every penny you have, leaving you bankrupt. Don’t you think it will be easier to just get a auto insurance and make monthly payments ?

Protecting your car is just as important as protecting anything else you love. And a car insurance is going to do just that for you. Be safe, drive safe!

Also, do check out the tips you can use to get the car finance deals here.

Auto Warranty Basics

When you buy a car, there are few factors that you have to consider, auto warranty being one of them (here is a beginners guide to auto warranty). All cars come with a warranty that is included in the price of the car and covers certain repair and defective cost. What about when this warranty expires? All cars these days are loaded with expensive and complicated technological features. And the chances of something being faulty is quite high. You don’t want to risk it. Hence, comes Extended Warranty to the rescue.

The manufacturer’s warranty or bumper-to-bumper warranty expires after a certain period. For some cars it maybe after 3 years or 36000 miles, for some it maybe 10 years or 100000 miles. You can increase the period of warranty by buying an Extended Warranty.

As the name suggests the warranty is an extension to the original warranty that is given by the manufacturer of the car, although the coverage and other factors differ. It is a service contract as you have to pay an extra amount and purchase it separately.

It is best to purchase this warranty either at the time of purchase of your vehicle or before the expiration of the original warranty. Why? This is because there will be significant increase in the cost of the warranty if you purchase it after the expiration.

The extended warranty is of two types:-

1) Dealership extended warranty.  

2) Third party extended warranty.

Here are a few points you need to consider before you buy an extended warranty.

1) Take a good look at the coverage that your first warranty is offering and then match it with the time period you want to keep your car for. The car maybe for a temporary purpose, you maybe moving to another place in a few years, or maybe you like to change cars, the reasons can be endless. The point being, if you are going to keep the car only for a small span of time, the chances are the manufacturers warranty will suffice. However if your car is going to stick by you through thick and thin, you might want to extend the warranty.

2) It is important that you have shopped for the best deal for the extended warranty just like you would for your car insurance. Research over the internet, look for quotes and go prepared when you are making the final deal at the dealership. If the paperwork and other formalities are over-whelming enough, don’t buy it right away. You can settle for the manufacturer’s warranty and buy the extended warranty anytime before your original warranty expires. Which means you have a couple of years in hand. Most of us make a hasty decision and regret it later or let the salesman talk us into doing it. Avoid this, go prepared.

3) You should have a fair understanding of what is being covered in the extended warranty. Many extended warranties have coverage in tiers. Bronze, Silver, Gold, Platinum and Titanium. Bronze being the most basic coverage and Titanium highest coverage. Make sure you pay attention to the fine prints mentioned below or after the contract. It may seem ridiculous but it will give you information that the sales person won’t.

4) Check your deductibles. Deductible is the amount that you have to shell out each time you have your car fixed. It can be on a per claim or per visit basis. The deductibles on extended warranties are usually lower than the ones on the initial warranty. Most extended warranty deductibles may range from $100 to $50. You may get a $0 deductible too if you qualify for it. Although this is very very unusual. Sometimes you may have an option to choose your deductible. A higher deductible means a lower plan cost and vice-versa.

5) It’s good to get a warranty that is transferable because it a brilliant selling point for when you plan to give your car away. This means that the person who buys your car can enjoy the benefit of the warranty and that works for your benefit while you are selling it.

6) Some extended warranties have limitations as so where your car can be repaired. Some expect the car to be repaired only at the dealership from where you purchased the warranty. This may cause inconvenience because what if you are traveling to a distant place over the weekend or you may be moving to another city for a couple of weeks. It will be in your best interest to buy a warranty that lets you get your car serviced in more that just one place.

7) Breakdown warranty and Wear-and-Tear warrant – Some warranties may cover only break down of your car i.e only the parts of a car that break are covered. This may or may not very unlikely because breakage may not be the only reason for a car failure. The wear-and-tear warranty covers breakdown of the car due to worn out parts that may need to be replaced which is a likely phenomenon for most of us. Make a note of these variations in your warranty contract as they will prove to be very useful when you actually have to make use of the warranty.

People tend to have a bad experience with extended warranty, but it doesn’t have to be. It is you who has to decide whether you need an extended warranty or not in the first place and if you do need one, make sure to look into the nitty gritties of the contract so you make the right decision.

“Little things Make A Big Difference”

Car Loan

Buying a car is an expensive affair. It comes with a number of expenses from insurance to warranties. It is an addition to your monthly expenses and  makes the budget really tight. Use these 9 simple hacks to save big on your car loan. This might ease things up a little.

1) Round up payments
Round up your payments instead of paying what is suggested by your car loan provider. This way you’ll pay a few dollars extra every month and repay your car loan at the earliest.

Let’s say you got a loan for $30000 with an interest rate of 3.11% for 60 months. This means your monthly payment will be $541. Instead pay $600 every month. This will reduce the number of months for your installments and save you the interest that you would be paying for those extra months. Those few extra dollars won’t hurt your pocket much, in fact it’s a benefit in the long run.

2) Refinance
Refinancing is where you get a new loan to finance the earlier one. This will be beneficial only if you are able to lower your interest rate without extending the term of the loan. Otherwise you will end up paying the same loan amount but a higher interest.

3) Sacrifice
That’s right. Make a few sacrifices. Cut down on unnecessary costs- dining in restaurants, junk food, spa days, shopping and the list can go on. Make a monthly budget and stick to it. This will help you save a few extra dollars that you can use to payoff your car loan faster.

4) Don’t let the dealer define your creditworthiness
We know that our credit score determines the interest rate that we get on our loans. A better credit score accounts for a better interest rate. So before you make a deal, take a good look at your credit score. Research the best deals that you can get online and then march to the dealership – confident and armed. This way you have a benefit in the negotiation

5) Do not skip payments.
Never ever skip a payment or two for that matter. It all starts here. Your payments get delayed one month to another and it goes on. This results in an increase in the term of your loan which is exactly the opposite of what you want to do. Your lender may give you the option to skip a payment but it’s a trap, so be careful.

6) Don’t finance your add-ons
The sales people at the dealership are going to offer you a ton of add-ons in the most rosy way ever. But you have to know that most of this is just to make the dealer an additional profit. Don’t finance the add-ons, instead buy them. Decisions that you make at the dealership with regards to all this may be hasty ones and you may just end up increasing the overall cost of your vehicle. Instead, you can decide on all this after you buy your car and purchase it separately instead of financing it. This way you avoid an addition to the loan amount.

7) Two payments a month.
This may seem silly but is has an impact on your car loan payments. Divide your monthly payments into two parts and pay every two weeks. This way you’ll actually be making 13 full payments instead of 12 in a year. Ask  your lender is he allows this. Also, if you get paid twice every month, this is your go to option.

8) Additional payments
Making an additional payment whenever you have some money at your disposal is going to save you some loan money. This can be a Christmas bonus, a tax refund or lucky draw maybe? Try and make at least one extra payment in a year.

Or divide this lump sum amount into equal monthly installments over the year and pay along with your usual amount. This too is going to have the same effect as rounding up your payments, i.e. It will cut a few months off. Make sure you ask your loan provider if these pre-payments can be made without any penalties and restriction.

 9) Cash Rebate or Zero Interest Loan?
Most of us when given an option between a zero interest loan or cash rebate almost always pick the zero interest loan even without weighing the value of both. There is a good chance that the cash rebate is going to save you more money that the zero interest option. So do your homework, put in the extra effort to calculate what is the result of both offers.

Make use of these tips and you’ll definitely save a very good amount on your car loan. In fact, not only your car loan, you can use these tips for other loans too.
Here is a Beginners Guide On How To Get A Car Loan.

Car Loan

You’ve decided that you want to get your first car. You’ve probably even decided the make and model. Now it’s time for you to actually buy your car and you may be a little confused as to how you’re supposed to go about financing it. Thinking of a car loan? We thought so.

Here is a guide to help you get started.

Step 1) Take a good look at your credit score
Your credit score is going to play a very important role in determining your car loan rate which is the interest you are going to pay on the oan. This means the better your credit score, the lower will be your car loan rate, which means higher savings on the interest and vice-versa.
A credit score is a numerical expression of your creditworthiness. So you want to make sure that you take a few steps to improve this score.

Step 2) Decide on your monthly payments
You will have to jot down a budget for yourself to make sure that you are not overspending. It is important to pick a car that you can afford. Think of the amount that you can shell out every month without hurting your monthly expenses. Use the payment calculator to get an estimate of the monthly payments.

Step 3) Decide the term of your loan
You can spread the loan term to over three, four, five or six years. Most of us are going to opt for a five or six year term as it breaks the payment down to smaller bits making it easier.You might want to give this a good thought as it is going to determine the small variations in the amount you will actually end up paying at the end of your term. Keep this in mind – the longer your payments, the higher the amount of interest you will pay.

Step 4) Don’t exceed your price range
As we mentioned earlier, it is important that you pick a car that you can afford. Most of us pick our car first and then the think of how we are gonna pay for it, right? You’ve probably picked yours too. Try doing it the other way around. Scale out your finance first and then choose a car that fits your price range. This way you won’t have holes in your pockets by the time the loans have faded. You may get overwhelmed while shopping around but keep your budget in mind and you should be sorted.

Step 5) Take a note of the extra expenses
Buying a car involves a lot of extra expenses, some expenses you may be aware of right now, some you won’t. Fuel, maintenance and insurance are a given. Keep a tab of these expenses in your monthly budget. At the first stage itself you may have to shell out a few extra dollars, it can be for some safety accessory or extra feature that you want. This only makes an addition to your budget, so be prepared.

Step 6) Shopping!
Time to shop around and get the best deal out there for your car loan. Check out the interest rates offered by multiple dealerships. Do your research well, it’s going to work for your benefit. You can shop for an auto loan right here.

Step 7) Get a pre-approval
If and when you qualify for your car loan, you will get something know as a “pre-approval”. There are two benefits to this- 1) You can lock in your interest rate 2) You now have negotiating power with the lenders. Pre-approved loan amount should be such that it covers the purchase of your car along with a few additional costs. These loans usually have an expiration date. You have 30 days from the date of approval to present the loan checks to the dealers.
Also, having a bad credit score doesn’t mean that you can’t get a pre-approval. You can get one, only the interest rate may be a little higher.

Step 8) Complete your paperwork
By now you have picked your car and dealer and done your share of negotiation for the price. Its now time to finalize on the paperwork. You must know that it is very likely that the dealer is going to try and trick you into buying extra unnecessary accessories or an extended warranty or something of that sort. You know what this means – increase in your budget which you want to avoid. So play smart and be firm on your decision. There is no turning back after this point.

Step 9) Make your monthly payments
Your paperwork is now complete, you have your car and you will soon have to start paying your installments. Make your payments in full and on time to avoid penalties. Also it’s a good way to ensure that your credit score is not affected (you may want to buy a car again). If you want to finish your loan before time, you can make pre-payments. But check with your bank or the institution giving you a loan if there are any prepayment penalties.

Save Big On Your Next Car Loan Using These 9 Hacks
We hope you have a good experience shopping for your car and car loan. Select the best auto loan quote right here!

Auto Warranty Basics

Let’s start by getting a clear understanding about what an auto warranty is. Think of it as a legal promise that the dealer makes to take care of defects and repairs of your car for a certain amount of time and mileage. A basic warranty will cover a period of three years or 36000 miles.

Types of auto warranties.
Different types of automobile warranties have different levels of coverage. It important that you know these types well so you can pick the right one for you car

Bumper-to-bumper Warranty – This is the most basic auto warranty that covers almost everything except the wear parts of your car i.e the parts that have a limited lifespan like brakes, windshield wipers, sensors, light bulbs etc. The paint finish and body parts are not covered either.

Power-Train Warranty – This warranty covers that parts that put the car into motion like the transmission, engine, axles and driveshaft. This warranty too doesn’t cover certain wear parts like the battery or the clutch.

Roadside Assistance Warranty – This warranty will cover towing costs, change the tires if you have a car break down, get fuel when you run out of gas etc. Different dealers have offer different services. Get into the details of the warranty when you are offered one.

Rust or Corrosion Warranty – Rust or corrosion warranty will protect the metal parts of your car from rust problems. You can simply avoid this by giving you car a good wash and wax regularly.

Federal Emission Warranty -This warranty covers the repairs of emission related parts that are faulty. These are the parts because of which the car doesn’t meet Environmental Protection Agency Standards.

How to maintain the warranty?
We know that the auto warranty you take is a legal promise which means it is a contract, hence like any other contract it can be broken if you don’t go by the rules. If you car goes through an accident or if you misuse your vehicle like rash driving or racing, if your car is damaged due to natural disaster or if you have tampered with the odometer of your car – all this can result in your warranty going void. So you want to make sure that you read the do’s and dont’s of the contract very well. If there is something you do not understand, get the doubt clarified with a salesperson.

Difference between a auto warranty and a auto insurance.
The major difference between a auto insurance and a auto warranty is the type of coverage they offer. A auto warranty will pay for the mechanical breakdowns of your car or defects in the manufacturing of parts. A auto insurance will pay for damage of your car in case of a collision or accident like fire, theft, floods etc and more. A warranty doesn’t cover these instances.

Why should you get a auto warranty?
The most important reason to get a auto warranty is the financial assistance that you’ll get when your car is faulty. It is like a safety measure for your car. You don’t have to shell a big amount out of your pockets at once.

Extended warranty.
What is an extended car warranty? It is a warranty that you buy in addition to the warranty that the manufacturer has to offer for prolonged protection of your car. Its advisable to buy this warranty before the initial warranty expires as the prices may go up after the expiration. Its also important to check which parts of your car are covered and which are not covered by the extended warranty.

Should you get an extended car warranty ?
Now that’s a trick question, isn’t it? Well, it depends. You have to consider a few factors before you make a decision on extended car warranties Are you going to keep the car for a long time or is it temporary? Have you got the best deal on the warranty? Who is the provider of the warranty? Is it the manufacturer or a dealer? How reliable is your car? What are the deductibles?
These are a few questions to get you started. Want to know more about extended warranty? Click here.

Also make sure that  you do a thorough research on the deals that are being offered and shop for the best one, just like you would do for auto insurance.

Car Finance

Purchasing a car is not any straightforward choice. From paying the money in one shot, to purchasing a car using a type of finance, there are numerous alternatives everyone considers. You also additionally need to consider the expenses involved. Truth be told, it’s presumably the second most costly thing you’ll purchase after a home. So it’s vital to ensure you get the best arrangement on car financing.

So in case you’re purchasing now, here are a few tips to get you the best car finance deal:

1. Always consider Down Payment

There are a great deal of incentives with regards to buying a car, and you can place yourself in your shiny dream car with no cash down or down payment. Sounds incredible, right? But wait. Keep in mind, vehicles deteriorate quickly. So if you wish to finance the entire price of the car, you’ll get yourself upside down on the advance instantly.

It simply implies that you owe more than the car is worth. There are assessments done and different expenses such as taxes and licenses shall be included in the price of the car, which will now be a part of your loan amount. So, you owe more cash to the bank or dealership than the vehicle is really worth.

This is a terrible thought if you plan on offering or exchanging the car before the credit or loan is paid off. So it might look great to stroll of off the dealership with a fresh, out of the plastic, new car without having to pay a dime in advance, however, it will cost you a lot more in the future.

2. Buying a used car or a new car

A car is not any random investment, at least not an inexpensive one. Cars deteriorate in worth rapidly, so when you purchase another car, you can anticipate that it will diminish in quality from the minute you become the owner. Indeed, a new car normally diminishes in worth by 25%-40% in the initial two years.

Today, most vehicles have longer guarantees and warranties, that can, in any case, still be in effect even if you buy a car that is few years old. Also, you can frequently choose to buy an extended warranty, which is ordinarily far less expensive than the value of the car lost in the initial years.

So, be wise, and buy a used or new car, as per your requirement or need. Click
here to know more.

3. Understanding different payment and financing options

As a car buyer, you have a lot of options to explore in terms of planning your finances and choosing the correct financial or payment as per your capacity and need.

You must first consider all your monthly or annual expenses that you already have before deciding any plan. This will give you an idea as to how much expenses you already have before adding any additional car expense and hence, determine your capacity to pay the amount.

If you have enough savings already, you can opt to pay the entire amount outright (you could use your biggest investment, deposit or savings) and then, you don’t need to indulge in the hassle of getting a car loan and the process of it.

If you don’t have that much savings, you can opt for a suitable financial plan as per your capacity, credit rating, calculating and comparing the different APR’s (Annual Percentage Rate – which includes all the charges you will have to pay including interest. It is expressed as a yearly rate. You might have the capacity to negotiate this figure. Elements that impact your APR: Your record of loan repayment, current finance rates, dealers compensation, rivalry, economic situations, and uncommon or special offers are among the variables that influence your APR. Attempt to arrange the lowest APR generally as you arrange the cost of the vehicle) from different kinds of financial plans, and various other verticals.

There are plenty of options available such as personal loan, hire purchase, personal contract plans, leasing options, etc. Each type or category has its own features, merits and demerits. For eg:- Personal loans are generally the least expensive approach to fund a car deal, however, it is subject to a good credit rating. Unlike personal loan, in hire purchase, you have flexible repayment terms, say 12-60 months. However, the car is not yours to own till the final installment is paid. Hence, choose the plan that is the best for you.
If you want to know about how to save on car loans, here are some hacks.

4. Expect the unexpected

Now if you’re purchasing your car through a loan or financial plan, there are plenty unexpected circumstances that could make it troublesome for you to keep up the installments. Unfortunate events keep taking place, for example, work misfortune, separation, accident, death of breadwinner, ailment, repairs to your home or any kind of household breakdown.

Shield yourself against these unfortunate events by ensuring you have:

(a) An insurance policy which would ideally cover your life, health, home, accidents, medical illness and unemployment as well.

(b)An emergency fund which would act like a reserve during contingencies to cover no less than three months of costs or expenses. In the event that you pay for your car in an outright manner, you won’t have the stress of meeting month to month car installments. But, you might be left with next to zero reserve funds and might face cash crunch. Therefore, since you’re in possession of the car as the owner, you can trade or sell it to raise cash, if need be.

Hence, it is important to build an emergency fund to meet expenses at crucial times.

5. The Bottom Line

As a car buyer, irrespective you’re a newbie or a veteran, extensive research is compulsory and always required to know the current trend and understand the financial system at present. So do your homework and get information about everything you need to know in depth. This can be anything regarding different car finance plans, or evaluation of rebates and interest rates offered by different dealers or manufacturers, or even finding the trade-in value of your current car, or the real or true cost of owning a new car, etc. This will keep you prepared, alert and informed – Always!

We hope your car finance needs and any confusion regarding it, has been taken care of! This way, you’ll be in a much better position to financially plan about buying the car of your dreams!

Also check our blog on how to get a car loan.
You’re always free to give us feedback in the comments section.

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